What is that ‘Digital Transformation’ about?

Recently, the term „digital transformation“ has become more prevalent. Sometimes, people talk about “cool apps”, another time they are talking about technical innovations or even the new digital phase of evolution, such as the “internet of things”, on the horizon of innovation.

If there is one thing that can be found out through conversations with these different people, it is that everyone worries about the pace of change and the uncertainty of the future.

Companies realize this change as well. Whole industries are changed in the blink of an eye, the “players” are trying to defend their positions that they built up for decades with all their might – and although they’re usually trying it with the old paradigms, I respect that!

Why? Because it just isn’t done by “simply” adjusting strategies or putting new apps on the market. Whole organizations and companies have to be adjusted to new paradigms.

Before I talk about the necessary changes, I would like to comprehend what the “digital transformation” is about and why we are feeling this tremendous change.

1. Technical progress and innovations

The main driver of global changes is, of course, the ever-increasing technological progress and the associated innovations. It is through these developments that whole industries, business models and value chains are disruptively changed and create new markets with increasing speed. Wikipedia describes it in its German Version very aptly:

[…]”The new markets emerge unexpectedly for the established providers and are, especially due to their initially small volume or customer segments, uninteresting. They can show a strong growth and completely or partially displace existing markets or products and services.”
Source: Translated from German Wikipedia

A very descriptive image for that is – again – Apple. For many, an iPad or another tablet has become a staple of their daily routine, whether it’s private or business, just like their morning cappuccino. If we keep in mind that the iPad didn’t even exist 5 years ago, we can see how fast and with which impact a simple sentence like “everything that can be digitalized, will be digitalized” can become reality.

Link Schaubild Moorsches Gesetz Wikipedia

By Wgsimon (Own work) via Wikimedia Commons

This case is basically known since the 60s. During this period, Gordon Moore formulated “Moore´s Law”. If put in easy terms, it basically means that processing speed and memory capacity doubles every 1-2 years – at the same cost. Everyone who bought his first computer in the 90s can confirm this. Every 1-2 years, you can get more memory and faster processor speed for the same price.

To be correct, one must point out that this is not a scientific law of nature, but an empiric observation, which doesn’t lessen the impressive confirmation of this rule.

2. Globalization

Even though it seems worn after decades of increasing global networking , we can still say that globalization – the locally varying degree of interdependence in the economy, politics, culture, the environment and more recently, the digital world – is a key driver for change. You can get more information on this topic here, for example.

The degree of cross-linkage creates a complexity that was never seen before and which can hardly be approached with the familiar mindset. The extent is particularly apparent in the changed global roles and new paradigms in this year’s UN Security Council in September:

It is for the second time in the history of the US that an American president personally leads this council. President Obama requested a solution to combat international terrorism in front of senior government officials from all around the world. When asked for reasons, the US delegation of the UN stated the following towards ThinkProgress:

“The internet and social media have given terrorist groups unprecedented new ways to promote their hateful ideology and inspire recruits. The conflicts in Syria and Iraq have highlighted this threat, with an estimated 12,000 foreign terrorist fighters joining that conflict.” Quelle: thinkprogress.org

How could this process of globalization continue?

According to the future study “Logistik 2050” by Deutsche Post, this process could continue in “Scenario 2”, in which national states are reduced to “secondary actors” and the global exchange primarily takes place in a few, global megacities.

In contrast to that, “Scenario 4” describes a resurgence of nationalism and protectionism, which leads to scarce resources and stagnation of technical development.

3. Change of generations

The latest addition to this series is the generational change that is initiated by the ‘digital natives’. This generation has created its own idea of social networking and communication with Facebook and thus drives this change globally. This wasn’t a coincidence, but a clear objective, and can be found in the development of mission statements of Facebook:

[2004]
“Thefacebook is an online directory that connects people through social networks at colleges [Harvard only] “

[2005]
“The Facebook is an online directory that connects people through social networks at Schools
[Now there are two Facebooks: one for people in college and one for people in high school] ”

[2008]
“Facebook helps you connect and share with the people in your life.”

[2009]
“Facebook gives people the power to share and make the world more open and connected.”

Due to the rapid growth, Facebook had to adjust its mission statement multiple times – the original mission to connect the world was reached after 5 years! Now, their claim is nothing less than giving people the power to share and making the world more open and connected. Ouch, this is hard to swallow. A reminder: We are talking about a company, not a government…

The resulting ecosystem is now the origin for further innovations that can be scaled quickly through it. I recently got to know Jonathan Mall and his product “Mailmindmatch”.

“Mission: Matching Facebook Friends
Communication Analysis of your chat messages on Facebook. Ranking your friends according to their match score with you, helping to find the friends which are most likely to be tuned to your frequency.” Quelle: mindmatch.com

While it’s not that relevant for me, because I rarely use the Messenger to communicate, it completely changes with the thirty-somethings. I tried it nevertheless (see the following illustration) – with interesting results and surprised what’s possible with linguistics and semantics. If you want to try it, just click here.

Could this be a hint as to why Facebook is pushing is Messenger so much or why they simply had to acquire WhatsApp? Facial recognition already shows the degree of cross-linking between people. We’ll see about that…

In any case, it is clear that the dominant picture of uncommunicative, dissipating nerds that we had a couple of years ago was completely wrong. It is the absolute opposite: They are the first “global generation” which grows up under the influence of the digital “Google World”.

Quelle Foto: http://dontapscott.com/books/grown-digital/

The American professor Don Tapscott has proven this with an impressive global study. During this study, 11.000 young people worldwide were questioned about their ideas and behaviors, and the results were put in the book “Grown Up Digital”. The most important findings from this book:

“Today’s young people are using technology in ways you could never imagine.

Instead of passively watching television, the “Net Geners” are actively participating in the distribution of entertainment and information.

For the first time in history, youth are the authorities on something really important. And they’re changing every aspect of our society-from the workplace to the marketplace, from the classroom to the living room, from the voting booth to the Oval Office.